NCTA: Britt: For Cable, Advertising Could Outstrip Wireless

By Stewart Schley -- Broadcasting & Cable, 5/8/2007 1:45:00 PM

New ways to present advertising over cable’s two-way networks could present a bigger economic opportunity for MSOs than wireless communications – a sector presumed to represent the missing piece of cable’s “quadruple-play” future.

So said Time Warner Cable Inc. president and CEO Glenn Britt at a May 7 Cable Show session that addressed emerging opportunities in interactive and targeted advertising over cable. Asked to rank the potential contribution of new businesses, Britt said commercial services – supplying data and telephone connections to businesses – probably looms as cable’s biggest new-revenue contributor. But he ranked advertising just behind it, and ahead of wireless services.

The reason: Britt sees electronic advertising at large shifting away from traditional one-way media and toward interactive platforms that deliver nimble targeting of viewers and precise measurement of audience levels. The Internet is where most of that activity now is occurring, but with new on-demand and interactive content delivery capabilities, Britt said “we have the technology to do that on television.”

Seconding the notion was Comcast Corp. chief operating office Stephen Burke, whose company reported $313 million in advertising revenue for the 2007 first quarter. “Basically advertising is shifting to an interactive, two-way medium. To me it has a feeling of inevitability,” Burke said.

One example of interactive advertising’s rising profile: Comcast’s announcement April 30 of an agreement to let Yahoo Inc. sell advertising display and video advertising within Comcast’s customer broadband Web portal, Comcast.net. Comcast has invested about $120 million to build the Web portal, but stands to collect more than $1 billion over six years from the Yahoo representation and a forthcoming search-advertising deal, Burke estimated.

Also appealing to MSOs are new opportunities emerging on the television side, where on-demand program delivery and targeted, or “addressable” TV spots could appeal to advertisers already smitten by the Internet. But the industry isn’t ready yet. Britt acknowledged MSOs have to work together to present a unified front to advertisers or risk frustrating buyers with a patchwork of different approaches and models. “Advertisers like a national footprint,” he said.